Federal appeals court rejects Gunselman bail appeal

A federal appeals court Thursday upheld a Lubbock judge’s decision to deny bail to a businessman accused of making millions of dollars on fraudulent biofuel deals.

The U.S. Fifth Circuit Court of Appeals turned away Jeffrey David Gunselman’s appeal of U.S. District Judge Sam R. Cummings’ decision to deny bail after he was arrested in San Antonio earlier this year.

“The denial of release pending trial is supported by the evidence of record and the district court’s order was not an abuse of discretion,” the one-paragraph order states.

The case was reviewed by Judge Edith Brown Clement of New Orleans, Judge James E. Graves Jr. of Jackson, Miss., and SeniorJudge Jacques L. Weiner Jr., also of New Orleans.

The ruling means Gunselman, who is being held in the Lubbock County Detention Center, must stay in jail pending trial.

The date for that trial is tentatively set for Jan. 13 in federal court in Lubbock.

Gunselman, owner of the now-defunct Absolute Fuels biodiesel refining business, was the main target of a 79-count federal grand jury indictment handed down Aug. 8. The indictment includes 51 counts of wire fraud, 24 counts of money laundering and four counts of making false statements under the federal Clean Air Act.

Gunselman had promised to stay at his home in Lubbock and work with federal agents to recover money from the transactions in exchange for delaying prosecution.

But as his original defense team neared a plea agreement with prosecutors, Gunselman stopped talking to them and left Lubbock without telling federal agents.

He was arrested in July at a multimillion-dollar home he bought near Boerne.

His current defense attorney, Dan Cogdell of Houston, has said Gunselman helped federal agents recover about $15 million.

The case stems from a joint investigation by the Environmental Protection Agency’s criminal division and the Secret Service that led to allegations Gunselman sold oil refiners and brokers more than $41 million in federal renewable fuels credits without producing the biodiesel that was supposed to accompany the credits.

Gunselman faces a maximum sentence of 1,268 years in prison and fines totalling $19.75 million if convicted. He could also be ordered to pay restitution.